A dedicated outdoor air system and method that is capable of operating over a broader spectrum of conditions. The HVAC system of the present invention utilizes a heating means positioned within the return air passageway in order to optimize the regeneration of the desiccant wheel and energy recovery device. By positioning a heating means upstream of the regeneration side of the desiccant wheel, the system is capable of providing supply air having low dew points to the enclosed space while still providing improved energy efficiency over conventional HVAC systems.